US, China extend impasse over trade to the next round of talks
The talks failed to bring normalcy in trade relations as both sides refused to budge from their positions
Washington: The US and China made little progress at the end of two days of trade negotiations in Washington on Thursday as they stuck to their positions.
Amid continued retaliatory tariffs on $16 billion of each other’s goods, that came into effect on Thursday, the two sides exchanged views on how to break the impasse for bringing normalcy in their smouldering trade relations. Both sides seemed confident that the other will blink first because of its deteriorating domestic economic climate and thereby, left the impasse to persist till the next round of talks, said an analyst familiar with the negotiations.
The US and China “exchanged views on how to achieve fairness, balance and reciprocity in the economic relationship,” said Lindsay Walters, the White House deputy press secretary. She did not indicate whether the two sides made any concrete progress.
On Thursday, the US pressed ahead with its decision to slap punitive 25% tariffs on another $16 billion of Chinese goods, in addition to the imports of $34 billion of Chinese goods that were already subjected to duties last month on grounds that China engaged in “unfair trade practices related to technology transfer, intellectual property and innovation”, under Section 301.
In addition, the US trade representative’s office had set in motion a process for a likely imposition of tariffs on another $200 billion of Chinese goods by the end of next month under the condemned Section 301 provisions.
China promptly retaliated with its own fresh tariffs on $16 billion imports of American goods, which include fuel, steel products, auto, and medical equipment. The retaliatory tariffs imposed by China came into effect the same time that the US tariffs were imposed on Thursday. China is also expected to file a fresh compliant at the World Trade Organization against the US duties under Section 301 that was found to be violative of global trade rules.
China has consistently maintained that it is ready to address market access concerns, including the renminbi exchange rate issue, raised by the US. Beijing, however, insisted that the US must abandon the unilateral tariffs that violate core global trade rules when the talks are underway.
Given the inflexible positions adopted by the US, which has raised maximalist demands, China wants certainty and predictability that the US will honour compromises reached during the talks.
On Monday, US President Donald Trump had pronounced that there is not going to be much progress from the talks. In an interview with Reuters, Trump said ending the trade battle will “take time because China’s done too well for too long, and they’ve become spoiled. They dealt with people that, frankly, didn’t know what they were doing, to allow us to get into this position.”
Trump also said, “I think China is manipulating their currency, absolutely. And I think the euro is being manipulated also.”
“What they are doing is making up for the fact that they are now paying a lot for—hundreds of millions of dollars and in some cases billions of dollars—into the United States treasury—and so they’re being accommodated and I’m not, and I’ll still win,” he suggested.
Clearly, there is no common ground for resolving the differences as the US continues to shift the goalposts during the negotiations, according a person familiar with the negotiating positions of the US. On the ticklish issue of China’s exchange rate policy, Beijing has already signalled that it has left the yuan’s exchange rate against dollar to be decided by the market.
A senior official of China’s internet behemoth Alibaba told analysts during an earnings conference call on Thursday that “if US goods become too expensive because of tariffs, Chinese consumers can shift to domestic producers or imports from other parts of the world”, according to CNN.
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